Pilot zone to boost trade in Northeast Asia

Development area will support revival of China’s Heilongjiang Province

A security officer checks a truck at the border checkpoint in Suifenhe in Northeast China's Heilongjiang Province.Photo: IC

The State Council, China's cabinet, approved a request to set up a key development and opening-up pilot zone in the Suifenhe-Dongning area in Northeast China's Heilongjiang Province on April 19, according to a statement posted on the government's website on Wednesday.

The Suifenhe-Dongning area lies at the border between China and Russia, and is around 480 kilometers away from provincial capital Harbin and 190 kilometers from Russia's Vladivostok.

The approval was announced after the government published guidelines on the revitalization program of its northeastern region and the old industrial base on Tuesday.

The guidelines called for the region to make major achievements in key sectors and reforms by 2020, and achieve full-scale revitalization by 2030.

Song Kui, president of the Contemporary China-Russia Regional Economy Research Institute in Heilongjiang, told the Global Times on Wednesday that the new move shows the central government's continued commitment to further develop and revitalize Northeast China.

"The establishment of the zone is also in line with the country's policy of opening up, as the area is Heilongjiang's gateway to Russia and further to Northeast Asia," Song said, noting that the zone will compliment Russian government's plan to develop the country's Far East.

Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, said the approval from the State Council also raises the standard for the establishment of this pilot zone and will contribute to the opening up of China's northeastern region.

"It will also allow access to the Sea of Japan, via Vladivostok, and greatly narrow the geographic distance between Heilongjiang and cities along the east coast of South Korea," Bai told the Global Times Wednesday.

Currently, due to economic slowdown, Chinese exports to Russia have declined, while imports of Russian food and food grains have gone up due to a favorable exchange rate, which has improved people's livelihood, Song said.

The area is already part of Heilongjiang's blueprint to participate in the "One Belt, One Road" initiative.

Sino-Russian trade contracted by 22.4 percent in 2015 from that of 2014 to $69 billion due to the global economic slowdown, according to media reports in March.

Regional connectivity

On March 30, an international freight train carrying 104 containers traveled from Harbin, passed Suifenhe, and unloaded its goods at Vladivostok, from where the containers will be shipped to South Korea's Pusan and Chinese ports such as Shanghai in East China and Guangzhou in South China, according to media reports.

The new route offers a price advantage of around 500 yuan ($77) per container and more flexibility compared with the route through Dalian or Yingkou, ports in Liaoning Province.

The container freight train will run on a weekly basis.

Once China's industrial base, the northeastern provinces have experienced even faster economic slowdown than the rest of the country due to problems such as weak market-oriented mechanisms, lack of vivacity in the region's many State-own enterprises, and lesser development of the private sector.

The region's nominal GDP growth was well below the national average last year, with Liaoning, Jilin and Heilongjiang provinces reporting growth rates of 0.26 percent, 3.41 percent and -0.29 percent, respectively.

"The pilot zone will become a platform for bilateral trade, experimenting new methods in customs and cross-border transportation. It will also be used to try out new mechanisms in bringing companies to settle in the region," Bai said, noting that one of Northeast China's key problems is that it lacks companies that can retain talents.

Experts said, in the future, investment from South Korea is also possible to boost the development of the pilot zone.

"There is even possibility to attract investment from South Korea and Japan to Heilongjiang. Potential areas for investment being studied include culture, tourism, and healthcare," Song said.

Song also noted that China and Russia could cooperate in agricultural and food industry, banking on the region's organic food advantages and vast, fertile black soil.